Environmental Assessments and Major Projects Policy Considerations

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1 ASSEMBLY OF FIRST NATIONS Environmental Assessments and Major Projects Policy Considerations March 2011

2 Table of Contents 1. Introduction P.3 2. Major Projects Management Office P.4 3. First Nation Involvement and Consultation in Major Projects P.6 4. First Nation Challenges and Concerns P.7 5. Policy Considerations P.8 6. Recommendations for First Nations P.9 2

3 Introduction The natural resource sector significantly shapes the relationships between First Nations and government. Government natural resource management frameworks have shifted towards a sustainable development paradigm that emphasizes a balance of social, economic and environmental objectives. Unfortunately, natural resource management frameworks in Canada often neglect the socio-economic and environmental impacts of projects on First Nations. Identifying and mitigating the impacts of natural resource development is absolutely essential to ensure strong meaningful relationships between the Government of Canada and First Nations. Government must consider the wants of the natural resource sector as well as the rights, title, and treaties of First Nations in all regulatory approval processes. Traditionally, First Nation input in natural resource development occurs during the environmental assessment process. The Environmental Assessment (EA) is administered after the proponent submits a project description to the Canadian Environmental Assessment Agency (CEAA). After determining regulatory processes triggered by proposed activities, CEAA may convene an independent panel to identify environmental impacts associated with the proposal. Panels must assess proponent plans and ensure meaningful engagement and consultation with First Nation communities. The recommendations made by an EA panel inform Ministerial decisions to authorize or reject a project. Industry has generally considered the regulatory review and EA process, which together last an average duration of four years, an impediment to project development and efficiency. In 2007, the government of Canada sought to improve the overall effectiveness and efficiency of the regulatory review process by streamlining approvals through the Major Projects Management Office (MPMO). The MPMO resides within Natural Resources Canada (NRCan) and is administered through the Deputy Minister s Office. First Nations communities and individuals remain vulnerable to the negative impacts associated with major project development. Following international principles, the Government of Canada must ensure First Nations have adequate time to consider project proposals in order to grant free prior and informed consent to activities on traditional lands. When considering major project approvals, the Crown must consider its obligations to respect First Nation Treaty rights and title, accommodate First Nations concerns, uphold the duty to consult, and remediate impacts and losses. Crown duties may be difficult to fulfill in the compressed regulatory review timeline created by the MPMO. Furthermore, the shortened regulatory review period significantly hampers First Nation ability to understand and respond to project proposals. This report will highlight the structure and function of the MPMO and its ability to effectively regulate natural resource projects, adhere to First Nations Treaty rights and title and include First Nations in the decision making process, as well as outline 3

4 the legal frameworks that serve to support First Nations in this context. First Nations concerns regarding the regulatory review process of environmental assessments will also be provided. In addition, policy considerations will be discussed with respect to the need for natural resource development projects to respect First Nations Treaty rights and title, align project objectives with First Nations interests, and ensure sufficient consultation, accommodation and involvement in the decision making processes including the regulatory review, environmental assessment and the duration of the resource development project. Finally, a number of recommendations to support First Nations involvement in the natural resource sector, and in the regulatory review process will be provided. Major Projects Management Office (MPMO) On April 1, 2007, the Government of Canada released the Cabinet Directive on Streamlining Regulation (GoC Cabinet Directive). The directive, which replaced the Government of Canada (GoC) Regulatory Policy (1999), mandated the government to ensure that its regulatory activities result in the greatest overall benefit to current and future generations of Canadians. In addition, the directive contained provisions for government departments and agencies to work with First Nations and Aboriginal communities, governments and organisations to ensure all existing government obligations are met with respect to Aboriginal rights protected under Section 35 of the Constitution Act, In determining how to streamline regulation for the greatest overall benefit, the Directive set four general factors for decision making: impacts on health, safety and the environment; cost or savings to government and impact on the Canadian economy; potential impacts on government departments and/or Canada s foreign relations; and the degree of impact on affected parties. The Directive was understood to be an overarching policy guideline, with the intended goal of expediting approval processes. Following the mandate of the GoC Cabinet Directive, the Department of Natural Resources established the Major Projects Management Office (MPMO) in Referred to as a regulatory improvement initiative divided between individual federal departments, the MPMO has an allotted budget of $150 million dollars over a five year period. The MPMO has a general mandate to streamline and coordinate the federal regulatory review process for major natural resource development projects and enhance international competitiveness. Specifically, the MPMO aims to ensure an effective, accountable, transparent and timely review processes by creating a onestop office for industry seeking regulatory approvals from the Canadian Environmental Assessment Agency (CEAA), Department of Fisheries and Oceans (DFO), Transport Canada (TC), Environment Canada (EC), Indian and Northern Affairs Canada (INAC), and Natural Resources Canada (NRCan). Under its mandate the MPMO is also responsible for tracking, monitoring and maintaining Crown/Aboriginal consultation requirements, particularly related to reviews of major resource projects. The overall collaboration of departments within the MPMO has shortened the regulatory review period in half by eliminating duplication between departments and identifying delays to reduce lag times. 4

5 While the overall objective of the MPMO is to streamline the federal regulatory process and enhance international competitiveness, further objectives and expectations were necessary to support this objective moving forward. The responsibility of developing further objectives and expectations was assumed by a body of Ministers of the Crown, and came to be known as a Cabinet Directive. The Cabinet Directive introduced a set of administrative processes consisting of: Memorandum of Understanding, Major Projects Deputy Ministers Committee, Major Project Management Office and Project Agreements. Memorandum of Understanding (MOU) A memorandum of understanding is necessary to streamline the regulatory process and requires federal departments and agencies to develop and agree upon common objectives. The MOU signifies an agreement between the federal entities of the MPMO listed above, which delineates the roles and responsibilities of each department and expresses their commitment to the collaboration towards improving the performance of the regulatory process. In particular the MOU for the Cabinet Directive on Improving the Performance of the Regulatory System for Major Resource Projects calls for federal entities to recognize and integrate Aboriginal consultation to the greatest extent possible into the overall regulatory process. Major Projects Deputy Ministers Committee (MPDMC) The MPDMC serves as a governing body that is chaired by the Deputy Minister of Natural Resources and is comprised of each of the respective Deputy Ministers from each federal entity. The role of this committee is to oversee and ensure proper implementation procedures are followed, and the objectives outlined in the Cabinet Directive are fulfilled in development projects. Major Project Management Office (MPMO) MPMO members are chosen by the Minister of Natural Resources. This office is intended to improve transparency and public access to information during the regulatory review process using a monitoring and tracking program known as the MPMO tracker. Working together with federal entities the MPMO strives to create a single entry point into the regulatory system for project proponents, facilitating early discussions concerning the specific requirements for each respective project proposal. The MPMO is also active in leading ongoing research and policy analysis projects. Project Agreements Project agreements are necessary to each major project to ensure a smooth transition through the regulatory system. A project agreement is not a legally binding document and is made available for public access. The project agreement includes details of the major resource project and its compliance with the Canadian Environmental 5

6 Assessment Act and is accompanied by an Environmental Assessment work plan. This work plan outlines the roles, responsibilities and commitments of the federal entities and project managers. The project agreement is also meant to record all related and developed service standards and timelines, including all work plans regarding permits, authorizations, approvals as well as Aboriginal consultation and engagements. First Nation Involvement and Consultation in Major Projects Support for First Nations involvement and consultation in the regulatory review process of major resource projects is found in a number of legal frameworks. Aboriginal Treaty rights and land claim agreements are affirmed in Section 35 of the Constitution Act. In accordance with the provisions laid out in Section 35, Aboriginal peoples must have notification and approval of major resource projects on Aboriginal land, as well as participate in the federal regulatory review process. To date, Aboriginal participation in the regulatory process is facilitated through Aboriginal Crown Consultations, and Early Aboriginal Engagements with Project Proponents. Aboriginal Crown Consultations To ensure that Aboriginal Crown consultations are incorporated into the major project regulatory review process, the MPMO includes an Aboriginal Crown Consultation and engagement plan into each Project Agreement. During the review process the Major Projects Deputy Ministers Committee (MPDMC) is informed by the Department of Justice of special circumstances requiring the acknowledgement of Aboriginal Crown Consultations. Early Aboriginal Engagement with Project Proponents Although the Crown has a fiduciary responsibility to consult with Aboriginal peoples on the potential impact of project development on Aboriginal rights, project proponents are also encouraged by the MPMO to engage in early consultation with Aboriginal peoples regarding similar project impacts. Early consultations can take many forms including information sessions, meetings or written correspondence. Documentation of Aboriginal consultations and involvement along with individuals and locations participating as well as issues and proponent responses are required in the Project Description component to be submitted to the MPMO. The MPMO considers early project engagement integral to improving the quality and timeframe of the regulatory process by facilitating the development of a positive working relationship between Aboriginal peoples and project proponents, which allows for the sharing of project details and Aboriginal interests or concerns. Environmental Assessments and the Fisheries Act Further support for Aboriginal involvement, consultation and rights regarding major project development is provided under the Fisheries Act on Habitat. Guided by the 6

7 chief policy of no net loss and the maintenance of productive habitat, the Act requires all prohibitions to have an environmental assessment with consultation. Moreover, Section 35(1) prohibits any harmful alteration, disruption or destruction (referred to as HADD) of fish habitat. Consent for such impacts or HADD are only possible with Ministerial approval under Section 35(2) of the Fisheries Act on Habitat. Further provisions are provided under Section 36 of the Act which prohibits the deposit of deleterious substances harmful to fish/habitat, with no possibility of exemption unless by order-in-council or in areas with an absence of consumable fish species. In situations where these provisions are not met and project impacts are imminent the Act highlights a number of primary options or courses of action in accordance with the no net loss policy. These primary options are listed below (in order of preference); Move project (if possible), Substance control, HADD mitigation, Habitat Compensation o Like for like in same unit o Like for unlike in same unit o Increase capacity in different unit o Measures of last resort First Nations Concerns and Challenges First Nations have several concerns in relation to the MPMO. Concerns can be categorized into two broad categories: lack of time to prepare and engage on projects; and lack of mechanisms for engagement. This section briefly considers both categories. Lack of Time to Prepare and Engage The MPMO operates with a primary objective of shortening the duration of regulatory reviews. First Nations often express the desire to have more time in the review process in order to fully understand the implications of major project proposals and build relationships with project proponents. Understanding, relationship building, and informed negotiation are important to ensure the long-term success of any major project. However, the rapid approval schedules set by the MPMO afford little time to secure strong partnerships between First Nations and proponents. The lack of time can, in certain scenarios, preclude effective First Nation engagement. First Nations governments and communities often struggle to determine benefit/cost outcomes. Adequate time must be afforded for rights holding communities to carry out socio-economic analyses of major projects as means for granting or withholding Free Prior Informed Consent (FPIC). However, the MPMO goal to streamline approvals is inconsistent with emerging international principles and business best practices that encourage activities necessary to fulfill the prior and informed principles of FPIC. 7

8 Lack of Engagement Mechanisms First Nations seek greater input in the regulatory approval of major projects. Current regulatory review processes are lacking strong First Nation involvement, leading many First Nations to call for First Nation specific legislation to develop legal mandates for First Nation community engagement within the structure of the MPMO. Given the time necessary to pass new legislation or to amend existing legislation to reflect First Nations involvement in the review process could extend beyond the streamlined period for project review, many First Nations are considering internal protocol development as a viable means of action to hold project proponents accountable for the recognition of Treaty rights and title and appropriate consultation and accommodation. These concerns are further extended to the need for the formal integration of First Nations protocols into the overall regulatory process of major projects. To date, First Nations protocols have remained absent within the MPMO and stand as a difficult crossroads for First Nations in considering the impacts and effectiveness of such integration on First Nations Treaty rights and title. Finally, and perhaps of greatest concern to First Nations is the need to enhance or mitigate the outcomes of major resource projects. This concern calls into effect the primary options highlighted under Section 36 of the Fisheries Act, listed in the previous section of this report. Habitat and environmental remediation fall broadly under the project proposal requirements of the MPMO, particularly when Ministerial approval for a HADD is provided under Section 35(2) of the Fisheries Act. Unfortunately for impacted First Nations it is the monitoring of remediation requirements which falls short under the MPMO and is commonly attributed to a lapse in jurisdictional responsibilities, often resulting in the submission of self-assessed remediation reports. As a result of such lapses, the possibility exists for proponents to circumvent obligations to remediate and to mitigate the negative impacts of project development, or to abide by the policy of no net loss. Such omissions undermine the real need to identify and mitigate the negative impacts of project development on habitats which First Nations communities rely on for the maintenance of traditional practices and livelihoods and future sustainability. The ultimate challenge for First Nations moving forward will be achieving the formal recognition and integration of these concerns and protocols in the regulatory review process of major projects while continuing efforts to develop and implement informal measures to assist and support communities when faced with the potential development of major resource projects. Policy Considerations 1. Streamlining the regulatory process relating to major projects may infringe upon the Aboriginal and Treaty rights protected under Land Claims and Self- Government Agreements. 2. It is in the best interest of First Nations, the Government of Canada, and project proponents to allow enough time for First Nations to engage properly and decide whether to grant or withhold free prior and informed consent. 8

9 3. It is the duty of the Crown to consult with First Nations and this duty cannot be discharged through a proponent. Nonetheless, proponents should be encouraged to work with First Nations and to secure free prior informed consent to any actions that may infringe upon, abrogate, or derogate First Nation rights, treaties or title. 4. The definition of a major resource project according to the CEAA is broad and provides leeway regarding the inclusion or exclusion of projects within the major project regulatory review process. This could potentially influence Aboriginal engagement in the consultation process and favour government and/or industry objectives. 5. The project agreement document which contains the Aboriginal engagement and consultation work plan is not a legally binding agreement and thus may be subject to change, potentially overlooking Aboriginal interests in favour of government or industry objectives. 6. Although early Aboriginal engagement is encouraged in project development, there is no set timeframe required for Aboriginal consultation or accommodation prior to project proposal. This could impact the amount of time Aboriginal communities have to express their concerns regarding major resource projects. 7. Streamlining the regulatory review process through the MPMO may remove some of the individual responsibility of respective Ministers to analyze and assess all of the details associated with proposed major resource projects. 8. First Nations must be provided the opportunity to contribute to the regulatory review process, possibly through an advisory role. Recommendations for First Nations A strong case can be made for the potential of the MPMO to impede First Nations Treaty rights and title and to authorize resource projects with associated adverse environmental impacts on traditional lands. At this point, the importance of First Nations to control and to minimize and mitigate the harmful impacts of major resource projects on habitats, species and the environment cannot be understated. First Nation participation is vital to the decision making and regulatory review process for major resource projects. While it may take some time for First Nations concerns and rights and title to be recognized in formal legislative processes, there are a number of informal measures and protocols that are available to First Nations to ensure that their Treaty rights and title are respected and to mitigate the environmental impacts of major project development on traditional lands. Some of these measures include but are not limited to; the development of land use plans, activity monitoring systems and working relationships as well as establishing an authoritative role in the environmental assessment process. Land Use Plans The development of a Land Use Plan can be used as an important First Nations governance tool to achieve the following: Assertion of rights and title across traditional territories. Definition of spiritual, cultural and traditional uses of land and resources. 9

10 A planning framework with established goals, objectives and management ideas. Strategies for resource conservation and development. Guiding principles, vision and policy statements. A system of land use zones. Land use plans will provide First Nations with valuable documentation of the current uses and common definitions and values which have been assigned to traditional lands by various First Nations. This information may also provide leverage to First Nations when resource projects do not adhere to these written objectives and stated boundaries. Activity Monitoring Systems First Nations should recognize the importance of developing systems to monitor activities related to exploration and experimentation on traditional lands by industry, government and academic proponents. Such monitoring will not only provide updated activity information to the First Nations which may otherwise go unnoticed, it will also provide First Nations the ability to track and approve such activities on traditional lands. Such monitoring systems will also enable First Nations to be aware of any and all activities taking place on traditional lands and their associated impacts as well as ensure their participation in all stages of project development including the regulatory review process, environmental assessment and restoration phase. Developing Working Relationships Working relationships with federal, provincial and territorial fisheries and environmental authorities is an important facet in the protection of First Nations title and Treaty rights. The development of land use plans and activity monitoring systems provides First Nations an opportunity to enhance their ability to develop strong working relationships with project proponents. Such developments illustrate First Nations interest, and investment in project protocol and responsible development. This information can also inform the creation of engagement and consultation policies to ensure Aboriginal/Crown consultations adhere to First Nations interests and concerns regarding traditional territories. The development of written MOU s and Aboriginal Traditional Knowledge (ATK) policies outlining the working relationships with other First Nations communities as well as with the federal and provincial governments will document agreed obligations between parties to adhere to state protocols on traditional lands and ensure the recognition and respect of Treaty rights. Importantly, such policy and protocol development would promote First Nations self governance. In addition, Aboriginal capacity building programs such as the Aboriginal Aquatic Resource and Oceans Management Program (AAROM) and the Aboriginal Inland Habitat Program (AHIP) can further support the development of working relationships by providing technical training for the management of natural resources such as fisheries and fish habitat, while also encouraging communication and collaboration between First Nations and government. Environmental Assessments 10

11 First Nations must advocate for the appointment of a First Nation representative on the review panel for environmental assessments. Moreover, First Nations have the ability to form their own review panel responsible for examining the details of resource projects that pose potential harmful impacts to traditional territories. Not only will this support a more substantial role in the environmental assessment process, it will ensure timely notification of potential resource projects, the opportunity to approve or disapprove of such projects as well as further information to support the development of strong working relationships among First Nations and project proponents. 11

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